Act before the end of the year: Tax tricks: How families and pensioners can save cash this year | message
by Stefan Rullkötter, Euro am Sonntag
1 | Double budget
Anyone who has a second home at their external place of employment in 2020 can receive up to
Deduct 1,000 euros per month. Deductible
are also expenses for furnishings, garage
and one family trip home per week (30
Cent per kilometer of distance). Children at
live with the parents and one at the place of work
Renting a second home must be verifiable
share in the costs for the parental home in order to
to be able to deduct double housekeeping (FG Lower Saxony, Az. 9 K 209/18).
2 | Family contracts
Anyone who rents residential property to relatives this year must charge at least 66 percent of the local rent in order to
To be able to fully deduct business expenses such as loan interest and renovation expenses.
The benchmark is the cold rent that can be achieved for a comparable apartment plus the
Tenant allocable additional costs. A
Renting half the apartment to the
own life partner will not however
recognized as a “family tax-saving model”.
3 | Childcare costs
Parents can pay for themselves in 2020
Care costs for children up to old age
from 14 years as special expenses.
Two thirds of the expenses are deductible, up to a maximum of 4,000 euros per child. The tax office only accepts direct debit
or transfer amounts paid. Expenses for the catering of the youngsters as well as expenses for tuition,
Sports and leisure activities are against it
not deductible as childcare costs.
4 | Child benefit I
Child benefit is retrospectively a maximum of
six months from receipt of the application by the
responsible family benefits. These
The deadline is already in the setting
to be taken into account in the child benefit notification
and not only with the subsequent payment of the stipulated child benefit. The
The regulation is only applicable to child benefit applications
to apply after December 31
Received in 2017, the Federal Fiscal Court has now ruled (Az. III R 66/18).
5 | Child benefit II
The parents are entitled to child benefit
continue even if children of legal age between the ages of 18 and 25 are a voluntary
interrupt social year due to illness, ruled the Hessian finance court
(Az. 9 K 182/19). However, only the Federal Fiscal Court will finally address this legal issue
decide (Az. III R 15/20). Affected
Parents can refer to the model procedure
Appointed and objection against rejecting
6 | School fees
Who as a parent is entitled to child benefit
or child allowances can be 30 percent
of the school fees paid in 2020 as special expenses, a maximum of 5,000
Euros annually per child. Also expenses for
Schools in EU and EEA countries, such as the
Switzerland, as well as worldwide for German teaching institutes, are deductible for equivalent school leaving certificates. Are not deductible
Fees paid by parents for the visit
from universities and technical colleges.
7 | Retirement benefit
Who on January 1st, 2020 at least
64 years of age can be used for the
At the end of the year, claim an old-age pension for income from work, rental income and investment income.
Depending on the year of birth there is a maximum
a tax allowance of 836 to 1,900
Euro. So that the tax office takes this into account, 2020 is in the later tax return
fill out the KAP annex and apply for the cheaper test (line 4).
8 | Study in old age
Around 1.7 million retirees in this country
currently go after their retirement or
Retirement after a job. Who earns work in old age and this for that
Year he uses a home office as the center of his professional activity
the related costs in full
drop. The expense allowance is in
This constellation – in contrast to professional activities before retirement – is not limited to 1,250 euros per year.
9 | Honorary positions
The tax-free volunteer allowance is
720 euros annually. This allowance under income tax law favors activities
as a board member and treasurer,
Groundsman, equipment attendant and cleaning staff.
Do parents provide driving services to the children’s sporting away games or get involved?
As a volunteer as an amateur referee, expense allowances apply
under the flat rate. Payments can like that
are “timed” so that they remain tax-free.
10 | Grandchild care
Will grandparents have theirs for money in 2020
Grandchildren are cared for, the financial conditions should be recorded in writing. parents
In return, you can deduct the expenses as childcare costs if the carers themselves do not live in the household concerned. The amount is non-cash
to pay. In addition, parents can
Pay the caring family member the travel expenses deductible – the reimbursement remains tax-free for the grandparents.
11 | Healthcare costs
Who as a taxable retiree all
bundles health expenses not reimbursed by the health insurance, such as costs for dentures, glasses, medication, trips to doctor’s practices and cures, in 2020,
The effort can often be found to be extraordinary
Stop exposure. The tax offices calculate the taxpayer’s “reasonable personal contribution” as a percentage of total income
and then determine the deductible amount based on income in three tariff levels.
12 | Child allowance I
The child allowance is this year
7,812 euros. Of this, the
general living expenses and 2,640 euros
on the care, education and training needs (“BEA allowance”). For the
Training of an out-of-home,
Parents of adult child can pay 924 euros
deduct each year additionally. From one to
taxable family income of around
66,500 euros annually is the child benefit
offset against the child allowances.
13 | Child allowance II
In contrast to the child allowance, the
No BEA allowance for adult children
transferred from one parent to the other. That comes from a new judgment
of the Federal Fiscal Court (Az. III R 61 /
18). There was a mother in the model trial
required, both allowances from the child’s father
to be transferred to them. This is with
BEA allowance not possible even
when the father fulfills his maintenance obligations
do not comply, ruled the finance judge.
14 | NV certificate
Who as retirees in 2020 less than
Has a basic allowance (9,408 euros) as taxable income, can be exempted from the withholding tax by means of a non-assessment certificate. It must be applied for at the tax office and presented to the house bank, which then credits investment income tax-free. From this year on is the
Specification of the tax identification number
compulsory. The NV certificate is valid from
the permit usually for three years.
15 | Tax allowances
Who as an employee next year high
Expected childcare or maintenance costs or drives far to work, paid at
Spending at least 600 euros a year
Too much income tax every month. You can contact the responsible tax office for your residence for 2021
Enter the appropriate exemptions on the electronic income tax card. At
the payroll is reduced
the tax burden will increase accordingly from January 2021. A permit is also valid for 2022.
16 | Maintenance costs
Divorced or separated partners
can save their maintenance payments made in 2020 up to an amount of 13,805 euros
drop. If the ex-partner is a private patient,
Basic contributions for health and long-term care insurance are added. For other maintenance obligations, payments are up to 9,168
Euro deductible as an extraordinary charge. If the maintenance recipient has own income of more than 624 euros per year, are
however, these will be offset against tax.
17 | donate
Those who donate to charitable organizations this year can deduct the amounts as special expenses. One is also deductible
CO2 compensation paid voluntarily for air travel. For donations up to 200 euros
The bank statement is sufficient as proof, if that
Tax office requests receipts. Party donations
are each 50 percent deductible directly from the tax liability and as special expenses,
per year a maximum of 1,650 euros for singles and
3,300 euros for jointly assessed partners.
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